By ANDREA LANNOM
The Register-Herald
CHARLESTON, W.Va. — Some House of Delegates members are expressing their concern over parts of the proposals for the state’s budget, especially as it relates to border counties.
In a series of news releases, delegates singled out increasing the sales tax and tiering the severance tax.
Last week, Gov. Jim Justice announced the special session will start Thursday to deal with the budget. He said he hopes to be on the cusp of a budget he believes will be good for the state.
In the press conference, Justice said he thinks the budget will include a 1 percent increase in consumer sales tax along with other measures such as looking into the state’s tax system and will include Justice’s roads plan.
In a phone interview with The Register-Herald last week, Senate President Mitch Carmichael said this is a plan the governor, the Senate and many House Democrats support.
Carmichael said the budget figure will be “almost within a percentage point” of what was spent last year.”
He said the income tax under this framework will be reduced about 40 percent for lower income brackets and about 16-17 percent for upper income brackets.
He said there will be an 8 percent corporate net income tax, which he said he is working with the governor to reduce, and the plan also will include tiering the severance tax.
House Majority Leader Daryl Cowles, R-Morgan, said via a news release that he fears a 7 percent sales tax would make it harder for border counties to compete with neighboring states.
“Raising our sales tax that high could do significant harm to our economy due to the loss of retail activity, which could more than offset the supposed benefits of reducing the income tax,” Cowles said.
Delegate John Shott, R-Mercer, also expressed concern over how the sales tax could affect his area.
“Our sales tax is already higher than Virginia and Ohio,” Shott said in the news release. “If we raise the sales tax by 1 percent, we will have a higher tax than Pennsylvania, Maryland and Kentucky. Our local businesses are already struggling, and raising the sales tax will only make it more difficult for them to survive.”
Delegates said increasing the sales tax, gasoline tax and corporate net income tax could have significant effects on border county businesses.
“Retailers in Bluefield and other areas along the border already suffer from having higher gas and cigarette taxes than Virginia,” Delegate Marty Gearheart, R-Mercer, said in the release. “While I like the concept of cutting income taxes, doing it by hiking our sales tax to 7 percent is only going to hurt our border businesses. Couple that with higher business taxes and DMV fees, along with continued tolls on the Turnpike, and this plan is a major hit to the southern West Virginia economy.”
In another news release last week, the House of Delegates Liberty Caucus, which is comprised of about a dozen legislators, announced their opposition to the plan.
“For years, we have fought efforts to raise taxes and grow government, and the plan the governor and Senate are trying to push would do just that,” Delegate Pat McGeehan, R-Hancock said. “While we like the idea of lowering the income tax, the idea of offsetting it with even higher sales and business taxes will only hurt our economy — particularly in border areas.”
Three Southern West Virginia delegates announced their opposition to tiering severance tax in another news release, saying they feared it would hurt the industry.
“It’s clear to me this plan was designed to benefit one man: Jim Justice,” Delegate Tony Paynter, R-Wyoming, said in the news release. “This plan will benefit some coal companies at the expense of others, costing us jobs and lost opportunities. This plan is unfair to coal operators and the miners who are desperately wanting to get back to work.”
The news release said the Department of Revenue estimates the plan as it was introduced the final night of the regular session would cut severance tax collections by $135 million next year and $140 million to $150 million each year after.
Delegate Rupie Phillips, I-Logan, also announced his opposition to the tiered severance tax plan.
“While this plan might work for steam coal mines, our met coal operators will be unfairly punished by it,” Phillips said. “These companies are just now starting to recover some of the money they lost during the Obama administration and have just begun putting our miners back to work. We shouldn’t do anything right now that keeps them from providing jobs and opportunities for our people.”
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